FTX Collapse: How a $32 Billion Crypto Empire Imploded in 72 Hours

FTX rose from its 2019 founding to a $32 billion valuation and the third-largest crypto exchange in the world, manufacturing an illusion of safety through stadium naming rights, Formula One sponsorships, and endorsements from Tom Brady and Steph Curry. Beneath that polished marble storefront, founder Sam Bankman-Fried and a tight circle of executives secretly funneled $10 billion of customer deposits to their sister hedge fund, Alameda Research, which enjoyed a hidden exemption from the exchange's auto-liquidation system and propped up its balance sheet with the manufactured FTT token.

This episode traces the catastrophic 72-hour unraveling: a CoinDesk report exposing Alameda's reliance on FTT, Binance CEO CZ's decision to liquidate his FTT holdings, a $6 billion bank run, and the collapse of a non-binding Binance bailout. We follow the bankruptcy under Enron veteran John J. Ray III, the QuickBooks revelation, the $400 million SIM-swapping hack, the prison sentences, and the grueling but record-setting customer recovery.

How Alameda Research operated as both market maker and beneficiary of customer losses
The FTT token mechanism that artificially inflated FTX's balance sheet like printing arcade tickets
Why a bank run is uniquely devastating to an exchange that should hold one-to-one reserves
John J. Ray III calling it the worst failure of corporate controls he had ever seen
Why customers repaid at November 2022 valuations missed the later crypto rally

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